Volume 20, Edition 9

What a month. Our hearts go out to all of those who have been impacted by the hurricanes. The trucking industry was also focused on post storm events as rules were waived to permit the trucking industry to help facilitate getting supplies to those in hard hit areas. It is a great industry that always comes to the help of those in need. They should be proud of themselves. We thank them and all of our fellow citizens who go above and beyond to help those in need.

I had the opportunity to attend the public session on the NSA study of CSA in Washington this month. Anyone interested in the report can download a copy of the report here. It was an interesting meeting as various stakeholders presented their views on the pros and cons of CSA and ways to make the system better. We expect changes in the program in the future and will, as always, stay on top of those changes which will impact you.

I have gotten the attendee list of those currently registered at the MCIEF and I am looking forward to meeting old friends and getting acquainted with many more. I will be presenting a session on cargo liability and cargo insurer. Come on by and join the session as we plan an interactive session with all.

This month we report:

AAA REPORT – The AAA Foundation for Traffic Safety released a 15 month study titled Leveraging Large Truck Technology and Engineering to Realize Safety Gains. AAA notes that large trucks with gross vehicle weight rating of more than 10,000 pounds drove approximately 280 billion miles on U.S. roads in 2015 and were involved in a total of over 400,000 crashes, which resulted in 116,000 injuries and 4,067 deaths. The report focuses on advances in vehicle safety technology which will assist in reducing crashes including braking systems designed to shorten a truck’s stopping distance, systems that warn the driver if the truck begins to drift out of its lane, and systems that can detect when a crash is imminent and automatically apply the brakes if the driver fails to do so. The studies fact sheet can be viewed here.

UCR RULEMAKING – The FMCSA has published its proposed rule to reduce UCR fees. The fees would be reduced below the current level by approximately 9.10 percent. For the 2019 registration year and beyond, the fees would be reduced below the current level by approximately 4.55 percent. The fees for brokers and leasing companies are currently $76 per entity, but the proposal would reduce the fees to $69 and $73 per entity, respectively, in 2018 and 2019. You can view the rulemaking here.

ELECTRONIC LOGGING DEVICES – We have been reporting on the efforts to delay implementation of the ELD mandate. The efforts appear to have failed. An amendment that would have delayed the ELD mandate has failed in the U.S. House of Representatives by a vote of 173 to 246.The DOT appropriations bill still contains an active provision that would delay the ELD deadline for livestock haulers only.

TRUCK PLATOONING – The Federal Highway Administration conducted a two day demonstration of three-truck platoons . This was the result of a four-year research project to test the effectiveness of state-of-the-art driving and communications technologies. Truck platooning uses vehicle-to-vehicle communications technology to allow trucks to follow each other more closely – at about one second apart – and travel in a more coordinated fashion. They are now using Cooperative Adaptive Cruise Control (CACC) technology. CACC adds vehicle-to-vehicle communications to the adaptive cruise control capability now available in new vehicles. This connectivity allows trucks to operate more smoothly as a unit, reducing and controlling the gaps between vehicles. Federal officials expect truck platooning to dramatically enhance highway mobility as freight numbers rise.

MC NUMBERS – For a while we were reporting on the fact that the Uniform Registration System would do away with MC numbers. The URS was suspended after its initial start date and MC numbers continued to be issued pending reactivation of the system. It appears that MC numbers are expected to continue to be used as the FMCSA has announced that the 6 digit number will increase to 8 digits next year to allow more numbers to be released.

AUTOMATIVE DRIVING SYSTEMS – The DOT and the NHTSA released new federal guidance for Automated Driving Systems (ADS): A Vision for Safety 2.0. This is the latest guidance for automated driving systems to industry and states. Specifically, the new Voluntary Guidance:

* Aligns Federal Guidance with the latest developments and industry terminology; and

* Clarifies Federal and State roles going forward.

The Guidance and more information on automated vehicles can be found here.

CASES

CARGO

In the District Court in New Mexico the Court held that a plaintiff failed to comply with the claim filing requirements under the Carmack Amendment. The Court held that the many letters to the motor carrier and its insurer were insufficient when a determinable amount of money was never demanded by the claimant. The fact that the motor carrier had started an investigation did not preclude the motor carrier from asserting the claim requirement. The Court also preempted all other state law claims. (Kellogg v. Wheaton Van Lines, 2017 WL 3881417)

What happens when a driver expresses concern about the loading of a shipment but takes it anyway? The Eastern District in Pennsylvania held that the motor carrier could not rely on a “shipper’s act” defense when the driver was aware of the problem and should have taken additional steps to protect the cargo. The Court further concluded, unlike the above case, that a multitude of documents, when taken together supported compliance with the claim filing requirements under the bill of lading. The Court held that there also remained questions of fact as to whether there was a limitation of liability available to the motor carrier. (Alterra American Ins. Co. v. Daily Express, 2017 WL 3891960)

We do not see many coverage cases dealing with cargo insurance. This month a cargo insurer was successful in declining coverage for an insurer who voluntarily paid a claim that the insurer disputed. In the Middle District in Tennessee a motor carrier sought recovery for payments it made to a customer who rejected a shipment which was delivered outside required temp but which was held by the USDA to be undamaged. The Court held that when the policy covered the insured’s legal liability a voluntary payment would not suffice to establish coverage when there was a potential defense to the claim. The Court also held that assumed liability under a transportation contract would not be covered when the main policy excluded liability assumed under contract. (Dark Horse Express, Inc. v Lancer Insurance Co., 2017 WL 3977692)

Shipments which arrive outside required temperature, but not necessarily damaged, are a constant problem for motor carriers. The District Court in New Jersey held that a motor carrier who paid the claim to the cargo owner was entitled to recover from the carrier upon whose line the loss occurred for the payments it made. The Court also held that the plaintiff was entitled to recover storage, inspection and disposal costs too. (Mecca & Sons Trucking Corp. v. White Arrow, Inc., 2017 WL 3981134)

A broker’s effort to have a complaint for cargo loss dismissed was denied in the District of New Jersey. The Court held that the allegations that the broker acted as a carrier would withstand a motion to dismiss. The Court also held that ICCTA and FAAAA did not preempt a cause of action for breach of contract. (Hartford Fire Insurance Co. v. Dynamic Worldwide Logistics, 2017 WL 3868702)

In a different case the same Court held that ICCTA and FAAAA did preempt an unjust enrichment claim and a claim arising from breach of contract. It also dismissed all state law negligence claims asserted by plaintiff. (Mrs. Ressler’s Food Products v. KZY Logistics, 2017 WL 3868703)

Even when the plaintiff settles with an originating carrier it is still permitted to seek the balance from a delivering carrier. The Western District in North Carolina entered a judgment on default against the delivering carrier, with interest. (B&W Fiber Glass, Inc. v. Kerns Trucking, Inc., 2017 WL 3741977)

I am excited to see a case on a contingent cargo policy. The Northern District of Illinois held that a contingent cargo insurer was not obligated to pay a claim in full when the underlying motor carrier’s insurance policy had a sub-limit for specified commodities. While the insurer was required to pay the sub-limit, which had not been accepted from the motor carrier’s insurer, it was the determination that additional limits were not triggered simply because the motor carriers overall policy limit was higher which is important to underwriters and claims alike. (MGN Logistics v. Travelers Property Casualty Company of America, 2017 WL 3270280)

AUTO

The Western District of Kentucky held that the 2 year suit clause in a policy for uninsured motorist coverage would not be enforced against the insured who was seeking recovery more than 2 years after the loss. The Court held that the clause was invalid because it did not grant the insured the same right as it would have against another party. In other words the suit clause cannot allow for a period less than the insured would have had against the tortfeasor. (Acuity Insurance Co. v. Decker, 2017 WL 3710805)

A motor carrier was not charged with spoliation of evidence when it failed to keep the video recording from the truck even though it may have captured the accident. The Eastern District in Louisiana held that it would not impose severe penalties on the trucking company when there were issues as to whether there was even going to be a litigation at the time it was lost. The simple absence of the camera and the video was not enough to allow for a spoliation claim. (Wright v National Interstate Ins. Co., 2017 WL 4011206)

The same result happened in the Northern District of Alabama when the Court would not grant harsh spoliation sanctions when a trucker failed to keep downloaded information on the truck at the time of the accident, but agreed that it would instruct the jury that the trucker elected to not secure the information when its protocol generally required it to. The Court did dismiss claims for wantonness, negligent hiring entrustment, training and supervision, allowing the remaining causes of action and asserted defenses to proceed. (Barry v Big M Transportation, 2017 WL 3980549)

A shipper was not entitled to summary judgment when it was sued for personal injuries caused when cargo it loaded spilled from the motor carrier’s vehicle, causing injury to the plaintiff. The Appellate Court in Texas held that a shipper could not avoid its obligation to third parties by pointing to the fact that the federal regulations required that the motor carrier make sure that cargo was safely loaded. (Bujnoch v. National Oilwell Vacaro, 2017 WL 4197451)

A truck driver was not permitted to recover against a consignee when she was injured unloading freight in ice and snow The Court held that the consignee owed no duty to the driver to make sure that the location was free of ice and snow. (Flook v, The TJX Companies, 2017 WL 4099753)

Over in the Court of Appeals in Texas the Court upheld the entry of judgment in favor of a trucking company when a plaintiff was unable to establish that the trucking company was responsible for a subcontractor twice removed from the transport. The Court held that the plaintiff failed to present sufficient evidence that the defendant exercised control over the driver. (Elvir v. Brazos Paving, 2017 WL 3769015)

Despite the fact that a complaint alleged that the truck driver was operating a tractor which was attached to a motor carrier’s trailer and further alleged that he was the agent of the trucking company defendant, the Central District of Illinois held that the NTL insurer would not be entitled to a judgment that it was not obligated to defend the defendant. The Court held that certain allegations made it unclear that there was no chance of coverage and with a duty to defend greater than a duty to indemnify judgment on the pleadings was not warranted. (Great West Casualty Insurance Co. v. Ross Wilson Trucking, 2017 WL 3835699)

A plaintiff was successful in keeping a personal injury action in his selected forum when the Court concluded that the trucking company, as a result of its interstate operations, would be deemed to have sufficient contacts with the venue to establish personal jurisdiction. With personal jurisdiction over the defendant venue was determined to be proper in the Eastern District of Pennsylvania. (McMahon v. Arsenberger Trucking Co., 2017 WL 3740643)

The 5th Circuit Court of Appeals reversed a Trial Court’s decision to grant summary judgment on causes of action which were not part of the original motion When the plaintiff failed to file opposition to a trucker’s motion to dismiss negligent hiring, retention, entrustment training causes of action the Court determined that it would also dismiss the simple negligence and respondeat superior claim. The Appellate Court held that it was unwarranted and that plaintiff should be given a chance to submit evidence on the issue, sending the case back down for further proceedings. (Fret v. Melton Truck Lines, 2017 WL 3841581)

WORKER’S COMPENSATION

An insurer was granted summary judgment in a bad faith action filed by an employee who had been granted workers compensation benefit, but apparently not quick enough. The District Court in Arizona held that the insurer did not act in bad faith in undertaking an investigation into the claim. The Court held that the insurer’s actions throughout the investigation was proper and founded. (Roman v. Berkshire Hathaway Homestate Insurance Co., 2017 WL 3896291)

The Appellate Court in Illinois upheld the Worker’s Compensation Board‘s determination that all of a truck driver’s injuries were not casually related to an event during the unloading of cargo. The Court held that an injury arises out of and in the course of employment where the origin of the injury is somehow connected or incidental to the employment. The aggravation or exacerbation of a preexisting condition will be enough to establish a causal connection between a claimant’s current condition and his employment. (Garderewicz v Illinois Worker’s Compensation Commission, 2017 Ill App (1st) 161303 WC-U)

The Commonwealth of Pennsylvania held that the Worker’s Commission Board was not in error when it afforded full temporary benefits to a truck driver while he delayed treatment for the work related injury because he was undergoing chemotherapy. The Court agreed that the employment injury was also a substantial part of the disability and justified the payment. (Arms Trucking Company v, Worker’s Compensation Appeal Board 2017 WL 3597263)

See you next month! Happy Halloween – Hope you get a treat and not a trick